Summary:
- Fallout from Sunday’s Catalan independence vote has weighed on EUR and SPA35
- Overall risk sentiment still positive however with most indices higher
- GBP slides on weak manufacturing data
- Brent Oil falls below $56
The main news development driving the markets today has been the fallout from the Catalan independence vote with Spanish stocks selling firmly on the open and the Euro declining throughout the day. The scale of the declines however haven’t been too severe yet as traders are clearly still trying to figure out what exactly this means longer term. An attempted recovery was seen in the SPA 35 into the cash close and whilst the market is lower on the day, it has recovered around 100 points from its lows.
Other stock indices have enjoyed a bullish start to the week with yet another record high for seen in the US and both the UK100 and DE30 enjoying strong gains.The DE30 has received a boost from the fall in the Euro and the market is now closing in on all time highs and sits not far from the big 13000 handle.
Local currency depreciation has also played a role in the rise seen in the UK100, with a fall in the pound boosting stocks in London. The pound slipped after a worse than expected UK manufacturing PMI, and whilst the reading itself wasn’t particularly bad any over exuberance surrounding sterling after last month’s BOE decision has been checked further today.
The US manufacturing sector appears to be in rude health according to the latest data from ISM with the PMI reading jumping above 60 to the highest level since March 2011. Recent data has been strong with the majority this year in excess of 55, but against an consensus forecast for 57.9, there is little doubt that today’s print is an upside surprise. The US dollar is adding to recent gains on the day, but the rise is fairly measured with investors possibly cautious ahead of NFP later this week.
Elsewhere, there’s been some notable selling seen in Brent Oil so far today with the market falling back below last week’s low. The first trading session of the week is in stark contrast to the previous Monday for Oil, with just seven days ago price breaking higher to trade at its highest level since July 2015.
Cryptocurrencies are mixed on the whole today, but the market leader Bitcoin, has added to recent gains. Bitcoin reached a 3-week high above 4400 during today’s session and the panic sell-off which saw 40% wiped off the market at the start of September has made its way towards the back of trader’s minds who seem once more to be jumping in on the long side. An incredible situation is playing out in Zimbabwe with Bitcoin changing hands for more that $7000 on some exchanges with demand far outstripping supply.